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Penalty Mail Program Frequently Asked Questions

Q— Was the Penalty Mail Program terminated as of September 30, 2003?

A— Yes. The Penalty Mail Program was terminated as of September 30, 2003.

Q— What will happen to the funds formerly allocated for the Penalty Mail Program?

A— In the absence of any statute directing otherwise, the funds formerly allocated for the Penalty Mail Program will be distributed in FY 2004 and thereafter according to the statutory formula authorized under the Smith-Lever Act. These funds will be distributed according to the 2000 census. Please see the Million Dollar Table for additional information.

Q— When will these funds be distributed in FY 2004?

A— Beginning in FY 2004 and thereafter, these funds will be combined with the regular Smith-Lever Act Section 3(b) and (c) allocations. Therefore, funds will be distributed on a quarterly basis (i.e., October 1, January 1, April 1, and July 1).

Q— What can these funds be used for?

A— Since these funds will no longer be segregated from the Smith-Lever Act Section 3(b) and (c) allocations, these funds may be used for any “approved extension activity.” They will be no longer restricted to “official mail purposes” only.

Q— What will happen to the Penalty Mail Program savings from FY 2003?

A— Penalty Mail Program savings from FY 2003 will be provided to the institutions in the fourth quarter of FY 2004. As in prior years, institutions may use the FY 2003 Penalty Mail Program savings for “official mail purposes” only for the remainder of the period of availability under the FY 2003 distribution (i.e., through FY 2007).

Q— What will happen to any carryover funds from prior fiscal years (i.e., from FY 2002 and previous fiscal years)?

A— These funds will remain available for expenditure for 5 years including the year appropriated. However, these funds may be used only for “official mail purposes.”

Q— Are the Cooperative Extension Services still required to comply with Chapter IX of the Administrative Manual for Cooperative Extension Work after September 30, 2003?

A— With the except of Chapter IX Section D.2, Letterheads, the Cooperative Extension Services are no longer required to comply with Chapter IX of the Administrative Handbook. However, institutions must comply with institutional mail policies and Federal financial assistance regulations as they relate to mail costs.

Q— Is it okay to announce to our county extension offices that we will be transitioning to commercial postage meters?

A— Yes. You should announce to the county extension offices that you will be transitioning to commercial postage meters.

Q— Will postage remaining on the old meters (i.e., Penalty Mail meters) be reimbursed to us from the vendor?

A— No. The vendor will not be issuing any refund checks for the remaining postage on meters. Since the postage was downloaded through the system, all refunds and credits will be processed by the vendor through Official Mail Accounting System (OMAS).

Q— Will we be required to submit a monthly, quarterly, or yearly statement showing exactly how these funds are spent? If so, how much detail will be required?

A— Institutions will no longer be responsible for submitting a monthly, quarterly, or yearly statement showing how the former Penalty Mail funds are spent, but institutions may be subject to institutional reporting requirements.

Q— Can Cooperative Extension Services apply for non-profit status for mail purposes?

A— Yes. Since Cooperative Extension Services will be paying their own commercial mail bill, they may apply for non-profit status.

Q— What return address can be used on envelopes? Will return envelopes just go to the county offices?

A— Since this Chapter IX requirement will no longer apply, county offices may use their own return addresses on envelopes.

Q— Should the term “official business” be deleted from envelopes and post cards?

A— No. The term “official business” should not be deleted from envelopes and post cards.

Q— Are we still required to inspect every piece of returned mail?

A— No. Since this Chapter IX requirement will no longer apply, Cooperative Extension Services are not required to inspect all returned mail.

Q— Are we still required to comply with the letterhead requirements as stated in Section D.2 of Chapter IX of the Administrative Handbook?

A— Yes. Cooperative Extension Services are still required to comply with the letterhead requirements to show the relationship and cooperation between Cooperative Extension Services and the U. S. Department of Agriculture.

Q— Can we continue to use Penalty Mail meters until funds on the meters have been totally expended?

A— No. All Penalty Mail meters must be taken out of service for Cooperative Extension Service Agency Code 018 and State ID Cost Code.

Q— If the previous question is not possible, how do we get a refund?

A— All refunds and credits will be processed by the vendor through OMAS.

Q— Do you anticipate instructions/guidelines similar to Chapter IX of the Administrative Handbook being available?

A— No. NIFA does not plan to issue instructions/guidelines similar to Chapter IX of the Administrative Handbook. However, institutions may be subject to institutional policies and other mail regulations.

Q— Should the term “Penalty for Private use $300” be deleted from all envelopes and post cards?

A— Yes. This clause should be deleted since the Penalty Mail Program has terminated.

Q— What should we do if we have a large supply of envelopes with the following statements: “Penalty for Private Use $300” and “Official Business”?

A— You may continue to use these envelopes. However, the statement, “Penalty for Private Use $300" must be covered before mailing with either white-out or white address labels.

Q— Can stamps be used on the envelopes described in the question above?

A— Yes. Penalty Mail Stamps may be used on envelopes until all stock on hand has been exhausted.

Q— What will the role be of the Penalty Mail Officer in the future?

A— NIFA assumes that the current Penalty Mail Officers will assume other responsibilities related to commercial mail even though the Penalty Mail Program is terminated.

Q— When we convert to commercial meters, are we still required to use one of the four Federally approved mail meter contractors?

A— No. Since this requirement was a Chapter IX requirement you will now be able to get competitive bids and negotiate contracts..

Q— What is the recommendation for the distribution of funds remaining on the meters? Should the balance carryover into FY 2004 or it advisable to request the vendor to write a check for the balance?

A— Distribution of the funds remaining on the meters is an internal decision made by the Cooperative Extension Service. The carryover balance or unused postage remaining will be credited to the CES account through OMAS.

Q— Currently is it a Federal requirement that the meters are inspected quarterly or semi-annually, or should they be inspected by the county local post offices? Do you know if this is a regulation of the U. S. Postal Service?

A— You should consult the vendor or the U.S. Postal Service for the requirements.

Q— Will you consider asking the Cooperative Extension Services to submit their guidelines that will be used in this conversion?

A— No. NIFA will not request States to submit their guidelines that will be used in this conversion.

Q— Will the Cooperative Extension Services be able to use franked envelopes?

A— Yes. The Cooperative Extension Services may use franked envelopes with pre-stamped postage until stock on hand has been exhausted.

Q— Will bulk mailing permit number G-268 continue, or will this number change?

A— The Cooperative Extension Service permit number G-268 has been cancelled as of October 1, 2003. Cooperative Extension Services need to apply at the local post office for a permit to be used after that date.

Q— Is there a need to rescind the Penalty Mail privilege by issuing “Authorization Cancellation Memos” before the conversion to commercial mail meters.

A— Yes. Personnel who have been granted the Penalty Mail privilege should be notified that the program has been terminated as of October 1, 2003.

Q— Can a Cooperative Extension Service release mailing lists to Federal, State, or private agencies?

A— Mailing lists comprise systems of records established to assist in carrying out various programs of a Cooperative Extension Service. These mailing lists are for the sole use of the Cooperative Extension Service and should not be furnished directly or indirectly to any person, firm, association, or Federal government agency unless authorized by the individual Cooperative Extension Service director/administrator. State freedom of information or privacy regulations and institutional policies may apply to the release of these records. As such, legal consultation with the State Attorney’s office and institutional counsel is recommended concerning the proper handling of access requests.